The relationship between the auditor's tenure and stock price crash risk over the life of the company

Financial statements are one of the most important pieces of financial information needed by investors to make decisions; This information is provided by managers. Therefore, managers are likely to hide bad company news. But if the hidden information reaches its peak, it will be released all at once, which will cause a sudden and negative adjustment of the company's stock price. Therefore, the existence of these conditions has led to demand for independent auditing services to provide quality reports. , Prevent managers from secrecy. However, prolonged communication between managers and auditors may lead to a friendly relationship between them and ignore the bad news storage activities by managers and increase the risk of stock futures crash. On the other hand, prolonged communication may lead to a complete knowledge of the company. And lead to a reduction in the future stock price crash risk. In addition, auditors of companies at different life cycles may react differently to concealing bad news. In the absence of appropriate scientific and empirical evidence, the present study examines the relationship between the auditor's tenure and stock price crash risk over the lifetime of companies. In this regard, samples including 90 companies listed on the stock exchange during the period 2016- 2020 have been selected and tested. The results using the multivariate regression method indicate the positive effect of the auditor's tenure on the stock price crash risk. Also, as the company moves into periods of decline and recession, the role of the auditor's tenure on stock price crash risk will diminish.